The State Department will remove a major roadblock to construction of a massive oil pipeline stretching from Canada to Texas when it releases its final environmental assessment of the project as soon as Friday, according to sources briefed on the process.

The move is critical because it will affirm the agency’s earlier finding that the project will have “limited adverse environmental impacts” during construction and operation, according to sources familiar with the assessment who asked not to be identified because the decision has not been made public.

The department will have to conduct one more assessment — of whether the Keystone XL pipeline is in the “national interest” — before making a final permit decision by the end of the year.

The proposed TransCanada pipeline, which could transport as much as 500,000 barrels of crude oil a day from Canada’s “tar sands” or “oil sands” fields in Alberta has strained President Obama’s relationship with his environmental base and become a proxy for the broader climate debate. Protesters from across the country have gathered daily in front of the White House since Saturday, resulting in 275 arrests so far.

Oil sands contain a viscous oil called bitumen in formations of sand, clay and water, and to extract it, companies expend more energy and water than they do to tap other crude deposits. Unlike conventional oil drilling, exploiting these resources is more like strip mining and requires tearing up large stretches of forests in northern Canada.

Canada’s environmental ministry issued a reportlast month predicting that tar sands production will double in the next decade, causing greenhouse gas emissions from the country’s oil and gas sector to increase by a third between 2005 and 2020.

“This is the primary test for Obama and the environment in the period between now and the election,” said Bill McKibben, who co-founded the advocacy group 350.org and spent two nights in jail after being arrested Saturday at the protest. “This is his chance to do something on his own, without interference from Congress.”

But the project’s advocates — including United Association general president William Hite, whose union represents plumbers and pipefitters in North America — said it would employ thousands of Americans while supplying oil from a close ally. “It’s a job engine for the country at a time when we need the jobs, and until we do something else, we need the oil,” Hite said in an interview. “I don’t see how we can turn it down.”

In an e-mail, State Department spokeswoman Wendy Nassmacher declined to comment on the Final Environmental Impact Statement beyond saying that it is “scheduled to be released later this month.” But she noted the agency would hold a 90-day public comment period as it began its “national interest” review of the permit application.

“The State Department is committed to a rigorous and transparent process, and we look forward to the public meetings,” she wrote. “Although we expect to make a decision on whether to grant or deny the permit before the end of the year, we will not make a decision until we have completed this thorough review process.”

Environmentalists have spent months pushing the State Department to conduct a more detailed study under the National Environmental Policy Act, which compels agencies to outline the potential impact of their decisions.

The Society for Conservation Biology has also questioned whether the administration has sufficiently scrutinized the fact that the proposed pipeline and ones connected to it tracked the migration route for the endangered whooping crane, which could leave the bird vulnerable to toxic oil spills as well as polluted water near the extraction sites.

“Unfortunately, there is no evidence that the State Department is living up to its promises, and it looks like this review will still fail to assess the critical health and safety issues that landowners and community members will be dealing with,” Susan Casey-Lefkowitz of the Natural Resources Defense Council wrote in an e-mail. “We have seen no evidence of a detailed alternative route study, a thorough environmental justice study nor an expert pipeline safety study.”

State Department officials have spent the past few months responding to roughly 200,000 public comments and investigating issues including groundwater impact, pipeline safety, whether the project would spur additional tar sands extraction and whether oil shipped through it to the United States would ultimately be exported overseas. The results of this additional study did not change the department’s earlier assessment, sources said.

Some states the pipeline will traverse may challenge aspects of the project. Casey-Lefkowitz pointed to the explosion that hit TransCanada’s Bison natural gas pipeline in Wyoming last month, destroying a 60-foot section. Before the accident the company described the pipeline, which had been in operation for a year and a half, as “state of the art.”

TransCanada President for Energy and Oil Pipelines Alexander J. Pourbaix defended his firm’s safety record, saying, “Like any other form of transportation you can have events, but the good news with a pipeline there is much, much less a chance of having events than with any other form of transportation.” Pourbaix added that TransCanada had built in an array of monitoring and shut-off measures into the oil pipeline that would minimize any accident’s impact. “Keystone XL will be a very safe, and likely the safest oil pipeline built in the U.S.,” he said.

Without the pipeline, he said, the United States would become more dependent on oil-producing nations such as Nigeria, Venezuela and Libya. “The U.S. is going to remain dependent on crude oil for decades to come. The only question left to determine is where will that crude oil come from,” he said. “Canada is a far better environmental steward than any of these other countries.”

In a global market, analysts note, the heavy crude that will travel from Hardisty, Alberta, to Port Arthur, Tex., may very well end up being refined and shipped to Europe and Latin America to supply those regions’ demand for diesel fuel. Three operators who have signed commitments to take oil from Keystone XL — Shell, Total and Valero — run refineries in Texas in Foreign Trade Zones exempt from custom duties, making them well-positioned to ship refined products overseas.

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Juliet EilperinJuliet Eilperin is The Washington Post's senior national affairs correspondent, covering the transformation of federal environmental policy. She's authored two books, "Demon Fish: Travels Through The Hidden World of Sharks" and "Fight Club Politics: How Partisanship is Poisoning the House of Representatives." and has worked for The Post since 1998. Follow

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